Patent prices are down, and patent enforcement is an affair that seems to grow more complicated with each passing week (with respect to the United States, at least). Many in the business are now looking to China to pick up the slack in the patent marketplace.
Xiaomi is perhaps the one Chinese company that has made the most headlines over the past couple of years regarding its patent-buying activities.
As was the case for most of its compatriots, until relatively recently Xiaomi hadn’t made much of an impression on the global patent market. Despite the rapid growth of its business and brand, it filed few patents. Despite gradually ratcheting up its application rate, it seemed inevitable that the unicorn would have to splash some cash to acquire third-party patents if it wanted to ensure IP coverage before its push into new markets and business areas.
That changed in October 2015, when Xiaomi was assigned several tranches of patents from US-Singaporean chipmaker Broadcom. This was followed up four months later by a much more substantial transaction which saw the Chinese company acquire a portfolio including over 300 US patent assets from Intel.
Topping these was a headline-grabbing, multi-layered deal with Microsoft in May 2016, under which the US company transferred over a thousand patent assets to Xiaomi as part of a broader strategic collaboration.
With all those acquisitions – and with market conditions the way they are – you might think that Xiaomi has done with large-scale patent purchases for the time being. But the company line on that one is: ‘Never say never’.
Speaking to IAM recently for a feature in the latest issue of the magazine, Xiaomi’s vice president of IP strategy, Paul Lin, said that the company would not be shifting its focus toward smaller deals like the one it did with Casio in July last year. Rather, he indicated that Xiaomi is still very much open to potential big buys –if the deal is right for the company, of course. And as IAM’s Asia editor Jacob Schindler wrote recently, you can be sure that the Chinese company receives more than its fair share of approaches from brokers now that it has made its mark in the patent marketplace with those major Intel and Microsoft deals.
In other words, the fact that Xiaomi – and, presumably, other Chinese companies in a similar situation – is still in the market for patents can only be good news for brokers, intermediaries and IP owners looking to monetise their assets.